Water cut another ‘nail in coffin’ for Australia’s food processors

Reducing water allocations in the Murray Darling Basin is another setback for Australia’s $102 billion food and grocery manufacturing sector which is the second major industry in the regions behind agriculture, the Australian Food and Grocery Council (AFGC) said today.

Responding to the Murray-Darling Basin Authority’s (MDBA) proposal to cut up to 40 per cent of water extractions from the basin, AFGC highlighted that food and grocery manufacturing – which employs about 100,000 people in the affected regions – is already under significant pressure from large increases in power, a potential price on carbon and a 99 cent Australian dollar making food imports cheaper.

AFGC Chief Executive Kate Carnell said reducing water allocations across the food producing regions will add another “nail in the coffin” for major food processers, which are the major employers in towns along the River Murray.

“Industry is under intense pressure at the moment and the regions’ capacity to manufacture and process food in at grave risk,” Ms Carnell said.

“If the food processors leave the regions, the capacity for local farmers to make a living significantly reduce as well.”

Ms Carnell said many food manufacturers were already being forced to absorb added costs of production and were fighting for survival in Australia’s food production regions.

“Industry can only absorb extra costs for so long – that’s why is vital that that government and policy-makers in Australia create business conditions which enhance, rather than inhibit, the competitiveness and sustainability of Australia’s food and grocery manufacturing sector,” Ms Carnell said.

As proposed over the past two years by AFGC, a nationally-coordinated and “holistic” National Food and Grocery Agenda must be a major priority.

“Having a robust food and grocery manufacturing sector is vital to ensuring we have a safe, affordable, nutritious and sustainable food supply for Australians well into the future.”